Schwab: Advice Increases 401(k) Savings Rate

April 28, 2005 (PLANSPONSOR.com) - A new survey
shows that 401(k) participants enrolled in advice and managed
account services save more than 10% of eligible income in
such accounts, over 3% above the national average.

The Schwab Retirement Advice Indicators also show
that in the first quarter, the average savings rate
increased 8% for those who opted to have advice. This
amounted to a 10.3% savings rate average for this group,
up from 9.6% at the end of 2004. The national average was
7%.

According to
Schwab Corporate Services, women are more likely than
men to sign up for advice (54% compared to 39%), but
participants as a whole are signing up regardless of salary
and balance account. There is also an equal numbers of
participants between the ages of 26 and 55, which indicates
is also not a factor in such a decision.

“More than half of those enrolled in advice are age
45 or younger, which is great news given the challenges
of encouraging younger participants to save for
retirement. This demonstrates the value of removing
barriers, especially the barrier of cost, and of letting
people receive advice in the way they find most
comfortable, be that in person, over the phone or on the
Web,” said Jim McCool, president, Schwab Corporate
Services, in a press release.

The statement also made note of the fact that most
participants asking for advice have salaries below
$60,000; 43%have 401(k) account balances below
$25,000.

For more details on the results of Schwab’s
Retirement Advice Indicators, please go
here
.